Foreign usage fees cost travellers £62m
By UK CreditCards.com
A new report suggests Britons are failing to get a grip on how to use their credit cards when they head on holiday to a foreign country.
Post Office Credit Card has claimed that UK holidaymakers are set to spend about £3bn on credit cards between now and the end of 2010 while they are abroad. However, the company's research found that they will fork out over £60m in unnecessary charges during their trips. Almost half (42%) of the 2,045 respondents admitted to being unclear about the foreign usage fees on their particular card, with just 31% safe in the knowledge they will not be hit with any charges. The results also showed that 4.8 million travellers will be left with a nasty surprise when they receive their next credit card statement after their holiday.
"Holidays should be a time to relax and enjoy yourself, but these extra pounds paid every time you make a purchase could result in extra stress when the credit card bill arrives," said Az Alibhai, head of cards at the Post Office.
Reasons for using credit cards abroad
Britons undoubtedly favour using credit cards because of their convenience and security. This is particularly true in relation to booking holidays, when they are afforded protection against their tour operator going bust by Section 75 of the Consumer Credit Act.
However, the Post Office made the worrying discovery that 300,000 individuals will be using credit cards because they will have no other source of finance by the end of their break. Furthermore, a quarter of respondents planning to use their cards will be doing so to top up their spending money after running out of travel funds, while 15% will use them for purchases they then intend to pay off at a later date.
"The fact that overall spending abroad is down suggests that people are being much more careful when it comes to leisure spending and are keeping a close eye on their budgets," concluded Mr Alibhai. "We're urging people to look at the terms and conditions and shop around to see if it's possible to get a better deal by switching."
In addition to Mr Alibhai's comments, it is important to remember that not all credit cards carry charges for usage abroad.
For example, holidaymakers who are concerned about foreign exchange fees could consider using the CaxtonFX Global Traveller prepaid card, which carries no ATM fees or charges overseas.
Alternatively, the BreadFX Euro Prepaid MasterCard allows travellers to fix exchange rates before they head abroad, which could give them up to 10% extra to spend.
Published: 6 August 2010
- How to handle credit card and other bills while unemployed – If you lose your job or become too ill to work, here's how to handle your credit card and other bills ...
- Tips for applying for credit cards on your phone – With everything else your mobile can do, there's no reason you can't complete a credit card application on it, too ...
- Who can I add as an authorised user? – Want to add an authorised user? Here's who you can add, how to do it and what to expect once they're on the account ...